The biggest investment must of us will make in our lives is home ownership. Buying your first home is a big step in both your personal and financial life. As a first-time homebuyer, you likely have many questions both legally and financially. If you are purchasing your first home in Ontario, regardless of whether it is a newly constructed home from a builder or a resale property, there is a provincial land transfer tax exigible at the time the transaction is completed. Provided you meet the eligibility criteria, you could receive a partial or full land transfer tax refund.

If you or your spouse have never owned property in Ontario or anywhere else in the world, you may be eligible to apply for a rebate on the provincial land transfer tax. As a qualified purchaser, you would be entitled to a proportional share of the land transfer tax refund which is currently up to $4,000 thereby receiving some financial relief on your closing costs. As the amount of LTT payable is dependent on the purchase price, there would be no LTT payable by a qualifying purchaser of an eligible home on the first $368,333.00 of the value of the consideration. In the instance that the first-time homeowner marries and their spouse owned a home prior to marriage but did not own a home during the period of their marriage, then the first-time homebuyer may also claim a refund in proportion to his or her spouse’s interest to a maximum of $4,000.

However, if you are a first-time homeowner and married and your spouse has had an ownership interest in an eligible home in Ontario or anywhere else in the world while you are spouses of one another, neither spouse would be eligible for the rebate. You or your partner’s eligibility for a refund depends on whether you are spouses as defined under s. 29 of the Family Law Act.

The first-time homebuyer’s refund program is restricted to Canadian Citizens and Permanent Residents of Canada whom are over the age of 18 and will live in the home within 9 months of purchasing it. Notably however, non-residents who then become Permanent Residents or Canadian Citizens within 18 months of purchasing the property would then be eligible to apply.

As real estate lawyers, we can complete and sign an Ontario Land Transfer Tax Refund Affidavit for First-Time Purchasers of Eligible Homes form and obtain this refund for you on closing. Speak to one our lawyers if you are buying in the Greater Toronto Area (GTA) to also determine your eligibility for the Municipal Land Transfer Tax Rebate (MLTT) which is up to a maximum of $4,475.00 which would cover the full amount of land transfer tax  payable on a property priced up to $400,000.00.

Call one of our experienced lawyers today to represent you for all of your real estate purchase, sale, or refinance transactions.

Please be advised that the content is for information purposes only and shall not be construed as legal advice, which cannot be given without knowledge of the specific facts of your situation. You should never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website.  Moreover it does not establish a solicitor and client relationship. If you would like to discuss your specific legal needs with us, please do not hesitate to contact our office at 905-264-0012 and one of our lawyers would be happy to assist you.